With the end of the year just around the corner, it’s important to prepare your dropshipping store for Q4. It’s that time of the year where dropshippers battle their way through the season and hopefully make a big profit at the end!
In Q4, ecommerce sales basically explode. It’s the best time of the year to start your dropshipping store.
To prepare your dropshipping store for Q4, first of all, be aware of the rise in marketing costs. Furthermore, you should also think about top events such as Halloween, Black Friday, and Christmas. Finally, make sure to sell products that have characteristics of winning Q4 products.
If you don’t know how to pick winning Q4 products, don’t worry, I will cover it in this article!
What is Q4 dropshipping?
Q4 dropshipping refers to dropshipping in the last season of the year. The season starts on the 1st of October and carries all the way through until the end of December.
“So what is different in Q4?”, you may ask.
Well, you will find out in this article!
In this season, a lot of things change, and you will have to anticipate and prepare yourself and your dropshipping store for that.
Changes in Q4
To understand how to prepare your dropshipping store for Q4, you should first know what makes Q4 so special. So, which things change in this quarter?
Let’s begin by looking at the total ecommerce sales during that time.
A peak in ecommerce sales
As you can see in this chart, each year, there is a peak in the number of ecommerce sales in Q4. During quarter 4, more people buy stuff on the internet, and ecommerce sales typically rise by 15-25%!
This isn’t the only reason why your revenue could go up in Q4. According to Statista’s research, the percentage of ecommerce sales from the total sales is becoming higher and higher each year, as can be seen in the image below. It means that more and more people are buying in online stores instead of in normal retail stores.
In Q4 2010, ecommerce sales accounted for only 4.6% of the total sales. However, this percentage grew to 11.5% in 2019.
Increased marketing costs on all advertising platforms
With data from Adstage’s research, it can be seen that Facebook’s CPM increased by 37% in Q4 with respect to Q3.
In Q4, lots of businesses have discounts which they will want to advertise on Facebook with paid ads. Facebook is a bidding platform, so lots of companies will bid for their ad placement during Q4, which is why the CPM rises.
If you don’t know what CPM (Cost Per Mille) is, it is the cost to show your ad to 1000 people. In other words, it’s what you will pay for 1000 impressions.
If this increase seems huge, don’t worry. Like I’ve said, people are more open to buying products online in Q4 (for example, for gifts or because of the big discounts), so more people will click on your Facebook ad. The CTR (Click-Through-Rate) will rise by around 25%.
That means that your CPC (Cost Per Click) won’t rise that much (around 14%), as can be seen in the following image.
This increase in ad costs is actually pretty important, since it is the number 1 concern for 80.4% of ecommerce businesses in Q4, as shown by a study from Shopify Plus:
Higher customer service needs & longer delivery times
Like I’ve said before, ecommerce sales have a growth spike in Q4, especially during special events such as Black Friday.
As a consequence, shipping companies will be asked to process more packages than they are actually able to, which is why shipping delays often occur.
You will have to be aware and prepared for this, as you will get more customers contacting you about where their order is, when they are going to receive it, et cetera.
Make sure to let your customers know exactly what is going on and where their order is in the shipping process. And if they have a question, make sure to have a great customer service system in place.
If you need help with customer support, I suggest reading our complete guide here, which will guide you through everything you need to know to set up an awesome customer service system!
What are the special events in Q4 you should prepare for?
One of the main things that make dropshipping in Q4 so special is that you have all these special events where ecommerce sales go through the roof!
- Halloween (October 31st, 2020)
Halloween is the spooky holiday which everyone loves. To prepare for this holiday, Americans have spent about $8.8 billion on costumes, candy, and decorations in 2019 alone. This works out to be around $86.27 per person!
- Thanksgiving (November 26th, 2020)
The next event is Thanksgiving, which is celebrated by the US, Canada, and a few other countries. Each year, sales on Thanksgiving day are higher than the year before. Business Insider reported that in 2019, US ecommerce sales surpassed $4 billion on Thanksgiving!
- Black Friday (November 27th, 2020)
Black Friday is probably the biggest shopping event in the world, and its popularity is increasing every year. During Black Friday, retailers put lots of discounts on their products and advertise them heavily. Sometimes, these discounts can go as high as 70%. Forbes reported that in 2019, Black Friday saw $7.2 billion in digital sales in the US alone!
- Cyber Monday (November 30th, 2020)
Cyber Monday is basically the same thing as Black Friday, but it’s more focussed on electronics. A report from Adobe Analytics shows that in 2019, the record was broken, and the total sales in the US hit $9.4 billion
- Christmas (December 25th, 2020)
Christmas is probably the best event for dropshippers. You can take advantage of this event weeks before it happens, as people are already looking for gifts for their loved-ones weeks before Christmas! You can find lots of dropshipping products that are perfect to gift to someone. This is one of the biggest events of the year, as industry experts expected the average American to spend $942 per person on holiday gifts in 2019!
- After Christmas sales
This period after Christmas is also great for dropshippers and retailers, as some people have received a lot of cash or gift cards and are looking to redeem those on some awesome products!
- Bonus: US Presidential election (November 3rd, 2020)
The final event in the list is a unique bonus, the United States Presidential election, which will take place on November 3rd, 2020. It’s an opportunity for dropshippers to make an online store around presidential election products like custom caps, bags, mugs, and posters! If you’re interested, I suggest reading this article that shows 11 successful ecommerce stores during Trump’s election.
What is a winning Q4 dropshipping product?
During Q4, you can’t just pick any product to advertise and expect your sales to boom.
Instead, winning Q4 products often have some distinct characteristics which I will discuss now.
Winning Q4 product characteristics
In Q4, a lot of people are searching for gifts because of a birthday, Thanksgiving, or Christmas. That’s why it’s important that your product can be gifted to someone.
- Hobby niche
When people are looking for a gift for someone, the first thing they will often look at is their hobby. This is why giftable products in the hobby niche do really well in Q4!
- High perceived value
The second characteristic is a high perceived value. If you don’t know what this is, it basically means that people tend to think that your product costs a lot. This is important during Q4 because, during this time, you will have to compete with other stores putting a 50-60% discount on their products. This will be a lot easier to do if you have a product with a high perceived value.
- Not sold in stores
To have the highest chance of people buying the product directly in your online store, rather than in a store nearby them, you will have to make sure that your product isn’t sold in most stores.
- Can be put in a set
For some smaller products, people like to buy similar products at once in a set and make one gift out of them. If you have this type of product, like a bamboo toothbrush, make sure to create a bundle with, for example, an organic toothbrush holder and a toothbrush cleaner set!
Selling an unusual product during Q4 is really advantageous. People don’t want to purchase a “standard” Christmas gift. Instead, they will rather get something that’s funny or quirky and will impress others in the room as well! In other words, a product with a WOW-factor.
What niches are the best for Q4 and why?
Not all niches thrive in Q4. Instead, there are some that do the best because of some specific reasons.
I will go over the best niches for Q4 dropshipping below!
Fashion is a great niche for Q4 because of two reasons. First of all, people like to gift each other clothes. Second, people love it when there are big discounts on fashion items and love shopping for clothing on Black Friday!
Toys will do well in Q4 because parents like to buy their kids a lot of toys as a present for Christmas. It’s one of the days in the year where kids get gifted the most amount of toys!
3. Passionate hobbies
It’s great if you are selling products in a passionate hobby niche because they make for a great gift!
The jewelry niche is one that does really well in Q4, but more specifically, you will get the best results with customizable, sentimental jewelry.
This is one of the best niches for Q4 since a lot of people will buy their partner some jewelry, and it’s even more special when for example, his/her first name is engraved in the necklace.
The next great niche is pets. This one looks a lot like the kids’ toys niche because a lot of people consider their pets as a part of the family and will therefore also purchase a gift for them!
Do you want to learn about the ins and out of the pet niche with product examples and dropshipping store examples? Then check out our article about it here!
The last niche is the beauty niche. This one is again perfect because anyone looking to buy a gift for their wife, girlfriend, sister, or daughter will consider picking a product in this niche. Also, during Black Friday, a lot of girls are on the lookout for the best deals in this niche!
Additional tips to prepare your dropshipping store for Q4
- Use discounted product bundles
Like I’ve said before if someone wants to buy a bigger gift for someone else or themselves, they often like to buy your product in a “set” with different products, especially if the set is on discount! Using product bundles can thus increase your AOV (Average Order Value), which will leave you with a bigger profit.
- Set up email marketing
Since advertisement costs rise during Q4, it’s important to get the most out of all the visitors that come to your online store. By setting up an email sequence for abandoned carts, you will already bring back a considerable chunk of your lost revenue, all for free!
- Use SMS marketing
For the same reason as email marketing, people who already made an action on your online store (warm traffic) are much easier to convert than people who haven’t heard of you before (cold traffic). That’s why your ROAS (Return On Ad Spend) will be so much better if you can utilize SMS marketing.
Still not convinced? Check out this article on 10 reasons why you need SMS marketing while dropshipping!
- Consider hiring a customer service VA
If you are selling a few orders per day and you expect to scale up during Q4, I recommend considering hiring a virtual assistant for your customer service. As I’ve said, you will probably be contacted more during Q4, and hiring a virtual assistant allows you to focus on more important things!
- Create special discounts
In a study done by Shopify Plus, 74.5% of ecommerce businesses indicated that a site-wide discount is the most effective holiday offer. The events during Q4 create a special opportunity for brands to create big discounts without hurting their reputation.
- Test & find your best advertisements beforehand
Don’t wait until Black Friday to start advertising. Instead, start now, test your advertisements and find out which is the best one. This will keep your ad costs low and make sure you are advertising in a cost-efficient way.
As you can see, there are quite a lot of things to keep in mind that change the dropshipping game in Q4.
You will have to plan ahead for upcoming events like Black Friday, Cyber Monday, and Christmas to maximize your sales.
Also, take another look at the winning product characteristics I described above and see which one of the products in your store fits the best in those criteria. You will have the most chance of becoming successful with that product!
I hope that you’ve learned something about the dropshipping and ecommerce world in Q4.
Don’t forget to check out our full dropshipping in 2020 guide here, which goes over everything you need to know about the question, “Is dropshipping still worth it in 2020?”, and more!
If you feel like I’ve missed anything or if you have any questions, please feel free to contact me or drop your comment below!
Let’s crush this season!
Getting Started with Dropshipping in 2020
So, are you ready to get started with dropshipping? Or maybe you have already started, but you’re looking to get some inspiration?
If so, then I suggest reading this complete Shopify dropshipping guide.
It’s a huge article, but it contains everything that you need to know to create your own Shopify dropshipping store in 2020. It’s like a dropshipping course, but then for free!
Reading this article will surely help you to get started and to stay motivated while beginning and continuing your dropshipping journey.
Just don’t forget that success takes time. Keep improving each and every day!
And here are the articles I suggest you read next:
- The 17 Best Free Dropshipping Courses | Learn for Free!
- 21 Most Successful Shopify Dropshipping Store Examples
- Using PayPal for Dropshipping: How to Not Get Banned in 2020
- Dropshipping Startup Checklist: 10 Things to Do Before Starting